Islamabad - The Bank of Punjab (BoP) President Naeemuddin Khan has said that sound economic policies implemented during the last few years transformed the bank from a loss making entity into a huge profit earning unit.

“The bank has witnessed an increase in bank deposits up to 117 percent in last six years, while 39 online branches under the title ‘Taqwa Islamic Banking’ have been serving the people across the country,” Khan said while talking to media.

“We have transformed BoP from a loss making entity into a healthy bank with sound financials within last few years”, he added.  He revealed that in 2008, the BOP suffered total loss of around Rs17 billion, whereas in 2015, it generated profit before tax of around Rs5.7 billion.

The president added the BOP had provided Rs1.2 billion financing for the Lahore metro bus project, and had been fully paid back. “Similarly, Rs 1.37 billion were provided for the Islamabad metro project, out of which around Rs1 billion is outstanding,” he elaborated.

“Moreover, Rs8.447 billion have been provided for the Orange Line project against a government guarantee of Rs10.7 billion,” he said, and added, “The remaining amount would be disbursed for the project when required.”

Khan further said that between 2009-2015, the bank deposits witnessed a growth of 117 percent and touched the level of Rs356.6 billion. “The bank was also able to drastically cut the cost of deposits to 5.32 from 10.8 percent as compared to the previous years,” he explained. He refrained from revealing financials for the whole year, as the reports have yet not been approved by the bank’s board of directors.

However, he revealed that when he was given the job, he had two options: to keep taking salary while maintaining the status quo or to try and turn the institution.

In his words, he chose the latter and asked Chief Minister Shahbaz Sharif to give him freedom of operation and ensure zero political interference in the bank’s affairs.

According to Khan, the CM remained true to his promise, which in turn ensured merit and transparency in the organization, thus enabling this unprecedented turn around.

BoP president also dispelled the common perception that the BOP had been able to generate profits in the recent past due to heavy lending to government institutions and avoiding exposure to private borrowers.

“More than 80 percent of lending has been to the private sector; the BOP has only started financing government initiatives in the recent past,” he clarified.

He said BOP was also financing ‘Green Cab Apna Rozgar Scheme’ under which 49,000 vehicles had already been delivered, out of a total of 50,000 available under the scheme. “The deliveries started in March last year, and so far the scheme has a startling recovery rate of 99.9 percent, an unprecedented phenomenon in the financial world,” he added.

He stressed that the bank was investing in these schemes to generate profit and these decisions are made on merit rather than due to government pressure.

The terms and conditions had been negotiated with the government in detail, keeping the best interests of the bank in view.

The BOP’s president also revealed that due to realization of losses, made during the previous government’s tenure, the bank’s Capital Adequacy Ratio (CAR) had fallen to 1.05 percent in 2009, in 2015 it stood at 11.33 percent. As per State Bank of Pakistan’s requirements ‘CAR’ has to be maintained above 10 percent.

He claimed that during PML Q’s tenure loans worth more than Rs. 20 billion had been given to some members of the board, a clear case of conflict of interest.